Aave [AAVE] Breaks Out of Descending Wedge, Suggesting Potential for Further Gains

• Aave (AAVE) has recently surged 11.78% following a breakout from a descending wedge pattern, signaling a potential bullish trend in the crypto market.

• The protocol’s upcoming governance updates, alongside significant whale accumulation and the introduction of a $1 million weekly buyback proposal, have fueled positive market sentiment.

• “Aave’s recent price momentum reinforces the resilience of decentralized finance protocols amidst market fluctuations,” said a COINOTAG analyst.

Aave (AAVE) breaks above descending wedge, surges 11.78% as whale activity and buyback proposals indicate bullish market sentiment.

Price action and technical indicators of AAVE’s breakout

AAVE has exhibited noteworthy price action, having traded within a descending wedge pattern since early 2025. Following multiple tests of the descending resistance trendline, the coin finally broke above the $220 key resistance level, accompanied by price consolidation that points to a possible upward trajectory.

According to analysis from WorldOfCharts shared on X (formerly Twitter), there is potential for AAVE to rally towards the $258 key resistance level in the mid-term, with eyes set on the historical $350 psychological barrier over the long haul.

At the moment of writing, AAVE’s Relative Strength Index (RSI) stood at 49, indicating there is room for further buying opportunities. Additionally, the short-term and long-term moving averages, alongside the Moving Average Convergence Divergence (MACD) and momentum indicators, have flashed clear ‘buy’ signals, further validating the strength of this breakout.

Source: TradingView

On-chain insights supporting the recent price movement of AAVE

Data from IntoTheBlock reveals that a remarkable 80% of AAVE tokens are held by large holders, with 56% of these investors currently seeing profits. This suggests that many whale investors are likely to continue accumulating, leading to an increase in buying pressure that could drive the price toward the $258 resistance level.

Source: IntoTheBlock

Furthermore, Aave has seen large transactions exceeding $100,000 totaling an impressive $903.66 million over the past week, reflecting growing interest among traders. The volume of daily transactions has risen, paralleled by an increase in active addresses, indicating heightened network activity.

Source: Artemis

Market outlook indicates bullish sentiment for AAVE

In line with these developments, the Aave protocol has introduced a significant $1 million weekly token buyback under its new ‘Aavenomics’ initiative. This strategic move is anticipated to constrict the supply of AAVE, setting the stage for potential price appreciation following its recent breakout.

The long-short ratio within a 24-hour timeframe has seen an increase from 1.4 to 1.5 over four hours, indicating that more traders are adopting long positions on AAVE, which enhances the bullish sentiment surrounding the coin. This breakout marks a potential trend reversal after a prolonged downtrend, catalyzed by governance updates and the protocol’s recent announcements.

As large-scale investors eye AAVE for long-term holdings, the combination of strong buy pressure could see the coin break through the $258 barrier, aiming ultimately toward the $350 mark. Ongoing scrutiny of whale activity and network movements around these pivotal levels will provide critical insight into AAVE’s forthcoming price actions.

Conclusion

In summary, Aave’s recent breakout and subsequent price surge highlight a bullish shift in market sentiment, driven by key technical indicators and on-chain data. Stakeholders should keep an eye on governance updates, whale accumulation trends, and network activity as they gauge the potential trajectory of AAVE in the coming weeks.